SEPHORA, the LVMH-owned beauty and cosmetics chain battered by losses worldwide, just sounded the trumpet of retreat in Times Square. The retailer has backed out of a deal to expand into a jumbo space in the “Bow Tie” building at Broadway and 45th Street, next to the booming new Toys ‘R’ Us.
Insignia/ESG honcho Brad Mendelson, the agent for the landlord Moss family, was trudging through the snow yesterday showing the space to clients. He wouldn’t say why – or how – Sephora got out of a lease it signed a year ago.
The store was supposed to move into the 21,000 square-foot corner from its 8,000 square foot home one block south, at 1500 Broadway.
The Post earlier reported that Sephora was closing all its stores in Japan. LVMH boss Bernard Arnault denied that the whole Sephora division was for sale.
Just over a month ago, an LVMH spokesman painted a cheery picture of Sephora’s U.S. operation, stating that sales at 70 U.S. outlets were “growing at a double-digit rate.”
“When someone asks what we want for the space,” Mendelson said, “I say we want what we got for Sephora – over $500 a square foot for the 75-foot Broadway frontage, if you value the back at $125 a square foot. It’s the best location in Times Square.”
A Sephora spokesperson declined comment on the backtrack, but said: “We’re extremely pleased with our portfolio of stores and are committed to Manhattan, where we just opened our seventh store and have plans to add more in the future.”
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In a wobbly market, the European owners of the compact little Gorham, at 136 W. 55th St., are putting the 16-story hotel across from City Center on the block.
“The Gorham, with 125 rooms, will appeal to somebody who wants a mid-market property, or somebody who wants to boutique it,” said Insignia/ESG hotel specialist Tom McConnell, who’ll be taking offers.
He has his work cut out. “The industry was so badly banged by Sept. 11, it put an absolute damper on transactions,” he acknowledged.
Sean Hennessey, hotel analyst for Pricewaterhouse Coopers, noted that in 2001 overall, “revenues for hotels in the city declined 20 percent, but profits declined 50 percent.”
Ira Drukier, who with partner Richard Born owns the new Chambers, the Mercer, and the larger Wellington, said he’d take a look at the Gorham, on which “we made an offer once years ago.” He declined to guess what it might be worth.
“We’re always active,” Drukier said. “If we can pick up properties, we will. But so far no bargains.”
Of course, there was one recent hotel deal – the $115 million sale of the partly-residential Delmonico, at Park Avenue and 59th Street, to Donald Trump. But McConnell said, “That wasn’t really a hotel deal.”
Trump himself seemed to give that notion credence. “I’m in the process of deciding what to do with it,” he said yesterday.
“I’m in no hurry.” As Trump sees it, he didn’t buy a hotel: “I bought a location – the best corner in the city.”
Trump compared his strategy to that of legendary Green Bay Packers coach Vince Lombardi, “who said, ‘I draft the athlete – not the position.’ “
Trump said the Delmonico “will be redone in some form. It would be about 230 units of rental housing if I went that route, but I haven’t decided yet.”
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Going against the grain, a prestigious accounting firm specializing in non-profit clients is leaving Midtown East for Downtown. It’s to the eastern side, less affected by the disruptions around Ground Zero. But how many companies have done even that?
The 15-year lease will bring Condon O’Meara McGinty & Donnelly from 300 E. 42nd St. to 7,400 square feet on the 18th floor of 3 New York Plaza on Whitehall Street.
Rents at the Class-A building average in the mid-$30’s per square foot – about the same Condon O’Meara was paying uptown 10 years ago.
The firm was repped by Brendan Callahan and Barclay Tuck of Equis. Landlord Pan Am Equities was repped by Insignia/ESG partners Jeffrey Bernstein and Laurence Elbaum, with Andrew Lazarus.
Callahan said, “the firm’s four founding partners were all born in New York. They are committed to the city, and Pan Am made them an offer they couldn’t pass up.”
Elbaum explained, “Pan Am owns the building outright, with no mortgage. Companies with little or no debt have flexibility to make deals others can’t.”* Please send e-mail to:[email protected]